Chris Bowen

Assistant Treasurer and Minister for Competition Policy and Consumer Affairs

3 December 2007 - 8 June 2009

Transcript of 03/02/2008

Interview with Louise Maher

ABC Canberra

Tuesday, 3 February 2009

SUBJECTS: Nation Building and Jobs Plan

LOUISE MAHER:

The Prime Minister says he will move heaven and earth to try and keep Australia out of recession he says he can't protect us completely from the effects of the global economic downturn but he is very much hoping his $42 billion economic stimulus package unveiled today will cushion the blow. Chris Bowen is the Federal Assistant Treasurer, good afternoon to you.

CHRIS BOWEN:

Good afternoon Louise.

MAHER:

I guess that one of the concerns that's been expressed by the switch this afternoon is many feel that pensioners, the fact that pensioners tend to miss out in this money that's flowing from the Federal Government.

BOWEN:

Well of course pensioners would have seen a piece of our last economic stimulus package, our stimulus package which was delivered in December and now we've indicated we'll have a long term response; long term solution to the problems pensioners and the sustainability of the pensions in the budget. So we have taken the view that given that pensioners were, as I say, the centrepiece of the last stimulus package and given that they will be in many ways the centrepiece of the next budget; that this is an appropriate balance to reach in this stimulus package.

MAHER:

But low income earners and families also benefited from the last stimulus package and they're in line to get more hand outs this time.

BOWEN:

As I say pensioners will also be at the forefront of the next budget to be delivered in May. So we struck a balance across the board. There are significant payments to families of course in this stimulus package, but pensioners their long term solution will be in the next budget in May.

MAHER:

Now the payments for people earning under the $100,000 does that come in the form of a cash bonus or will that be something the people get back in their tax?

BOWEN:

No that would be a cash bonus to be paid over the next short period.

MAHER:

So within the next month?

BOWEN:

They will be paid, the range of bonuses - the back to school bonus for example is being paid today - but the rest of the bonuses will be paid over March and April.

MAHER:

The back to school bonus that's $950 for each school aged child that's being paid today is it?

BOWEN:

That's being paid from today.

MAHER:

Now a question from one of our listeners with the $950 payment to individuals, does that also apply to university students or part time workers?

BOWEN:

There is a $950 training and learning bonus which is paid to students who are receiving the youth allowance or Austudy or Abstudy. So students certainly don't miss out on the package.

MAHER:

We've got part time workers they would be earning around $12,000-$15,000 a year.

BOWEN:

Anybody who had a tax liability in the last financial year, so anybody who basically filled in a tax return, earning less than $100,000 will get the tax bonus of $950. This will apply to 8.7 million individual Australians.

MAHER:

If you earn under $80,000 you are eligible for the $950 cash payment but that tapers off a bit until you get to $100,000.

BOWEN:

That's right. Between $80,000-$100,000 it tapers down I think it's $650 and $350 down to over $100,000 that's when the bonus tapers out.

MAHER:

Can you tell us what the thing behind this latest amount of cash bonuses?

BOWEN:

Certainly this is a very significant package Louise and we've struck the balance, we needed measures which stimulate the economy when necessary which is over the coming months. But also over the long term investment in the future so for every dollar that we're spending on direct payments, we're spending $2 on long term investments and there is a range of measures in the package. Let me just highlight a couple of them. The schools rebuilding package for example this is the largest school building program in Australia's history.

MAHER:

This means that every school in Australia will get at least $200,000.

BOWEN:

Every school in Australia will be eligible for part of the program which is the $200,000 school maintenance renewal. Very significantly, every primary school will be eligible for rebuilding their library or school hall and if they feel that they don't need a library or school hall they will be able to talk to the relevant authorities about what they do need, so it might be getting rid of demountables and replacing them with permanent classrooms; it might be significantly upgrading the classrooms.

But we've taken the view that the first step is that there are many schools without halls many schools with inadequate libraries they need to be the first cab off the rank to be upgraded. Every primary school in the country will receive part of that $12.4 billion program.

MAHER:

What are you doing for public housing?

BOWEN:

There is a big battle of public housing. It has been under funded for a long time. As you know we've got a commitment to half homelessness so we've taken the decision to build 20,000 social housing units. That's accommodation of public housing and community housing, and that would be a very significant program. I think it's being referred to by third parties as the biggest public housing building program in Australian history - certainly post war - so again a very significant program.

MAHER:

Will the schools programs cover private schools as well as public school?

BOWEN:

Yes. Public and private in terms of the primary schools. In terms of the high schools; high schools can apply to build new sized laboratories and language labs (language learning centres) and they will be based on need. So the school will need to demonstrate that they need the funding and also on the ability to get cracking to get stimulus into the economy.

MAHER:

There will be some who argue that private schools need less support than public schools at the moment especially in terms of infrastructure so that the decision to include private schools?

BOWEN:

I don't think you can have a one size fits all program. There are also private schools, catholic schools and independent, non denominational religious schools, who aren't what you would call 'elite' colleges; aren't what you recall your well resourced schools. They are similarly resourced to public schools. Public schools and those schools have been crying out for this funding and they will receive it.

MAHER:

Kevin has called in now this is another complaint, complaints from the pensioners. Kevin is a CSS pensioner so he says he got nothing in the last budget and is getting nothing in this budget what's in it for him. Now people across the board and there are people seeing other people getting these like really large amounts of money on top of the $1000 that they received before Christmas and you can't blame some people for thinking 'what about me'.

BOWEN:

There will always be people who have a different view but look the last package is very significant for pensioners and importantly for example disability pensioners who missed out in previous government programs received for the first received the bonus.

MAHER:

Then you've got the self funded retirees who will argue we've saved, we've done the right thing, by the economy for years and there's no reward for it?

BOWEN:

As I say this bonus goes to 8.7 million individual Australians. That's a big sway to the Australian population. Anybody who had a tax liability that's a very significant number of people. Now of course there will always be some people who say what about me, but when you are providing payments to such a large sway of the community in two trances, and then we've also got the budget coming up in May in which we will deal with the Harmer and Henry reviews into pensioners, and giving them a long term sustainable solution. We just don't want short term solutions, they want a long term sustainable pension and that's what we're going to give them.

MAHER:

Just another question from our listener - the 2008 Budget had plans to reimburse parents for the money they have spent on getting their kids back to school - I think $375 for primary school students and more for high school students - is that still going ahead and the $950 is on top of that?

BOWEN:

Absolutely both programs are in full force.

MAHER:

Do you really expect given the current economic climate that people are going to spend all this money they get? I mean that's the government's hope to stimulate the economy but that people are worried about losing their jobs, worried about the gloomy talk that is around for very good reason, they would be thinking we'll probably just save this money.

BOWEN:

Sure we've done quite a bit of modelling and thinking about that and we believe the big bulk of it will be spent.

Look the important thing to say is this, and I think there has been a lot of ill advised commentary about this, because if somebody uses the money in this stimulus package or the last stimulus package to say pay off a credit card debt or pay it down substantially and they've got to feel more confident about spending throughout the year.

If you've got a five or ten thousand dollar credit card debt, you will be really careful about spending but if you've paid that down, or significantly reduced it, you've got to be more confident about spending throughout the year and you will be sustaining jobs throughout the year. And if you save, if you don't spend it all right now, but you save some of it and think I'll save it up in a few months and then I might spend it providing things are going ok in a few months time, well that as well is stimulus throughout the year.

Just because it's not all spent this week, doesn't mean that there is a major problem but it means we are sustaining confidence through the economy through the year and that's what's significant here.

People will spend - I actually think that people deserve to be able to spend or save their money as they see fit - we're not going to instruct them what to do with it but we believe a big bulk of it will be spent and will stimulate the economy and that which is not spent will be sustaining confidence over the medium term.